Exhibit 99.3
SEPARATION AGREEMENT
This Separation Agreement (this "Agreement") by and between Mattel,
Inc., a Delaware corporation (the "Company") and Xxxx X. Xxxxx (the
"Executive"), is dated as of February 25, 2000.
WHEREAS, the Executive has been employed by the Company as its Chief
Executive Officer pursuant to an Amended and Restated Employment Agreement
between the Company, and the Executive dated as of January 1, 1997 (the
"Employment Agreement"), and
WHEREAS, the Company and the Executive have agreed that the
Executive's employment shall terminate as of the date of this Separation
Agreement, and they wish to set forth their mutual agreement as to the terms and
conditions of such termination,
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Resignation. Effective as of February 3, 2000, the Executive
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hereby resigns from her employment with the Company, from her positions as a
member and Chairman of the Board of Directors of the Company, and from all
other positions the Executive may currently hold as an officer or member of the
board of directors of any of the Company's subsidiaries or affiliates.
2. Severance Payments and Benefits. (a) On March 2, 2000, the
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Company shall pay to the Executive the cash severance payments to which she is
entitled under Section 5(d)(i) of the Employment Agreement, as set forth in a
mutually agreed schedule of even date herewith (the "Schedule"). In addition,
the Company shall pay to the Executive, in accordance with Section 3(f) of the
Employment Agreement, the amount of any expenses that she has incurred on or
before February 3, 2000 for which she is entitled to be reimbursed pursuant in
said Section 3(f).
(b) As promptly as practicable after the Executive has had the
opportunity to elect her form of benefit in accordance with the Company's
Supplemental Executive Retirement Plan (the "SERP"), the Company shall commence
payment to her of her benefit under the SERP, the calculation of which shall be
set forth in the Schedule.
(c) Effective March 2, 2000, the entire balances due from the
Executive with respect to the Home Mortgage Loan and the Loan, as those terms
are defined in Sections 3(1) and 3(k) of the Employment Agreement, respectively,
are forgiven. In addition, on March 2, 2000 the Company shall pay the Executive
the additional amount set forth in the Schedule to make her whole for the
Federal and California income taxes and Medicare tax payable by her with respect
to the income she will recognize as a result of the forgiveness of the Home
Mortgage Loan.
(d) The Company shall also provide to the Executive the benefits to
which she is entitled pursuant to Section 3(j) and clauses (iv), (v) and (vi) of
Section 5(d) of the Employment Agreement. The Company shall return to the
Executive the painting owned by the Executive that is located in the Executive's
office. The Executive shall purchase from the Company certain paintings
purchased by the Company in 1999 and currently located in the
Executive's residence at the prices paid for such paintings by the Company. For
the avoidance of doubt, the Executive acknowledges and agrees that the items
referred to in the preceding sentence shall not be subject to clause (iv) of
Section 5(d) of the Employment Agreement.
(c) The Company shall continue to provide home security services and
a driver/personal bodyguard to the Executive, on the same basis as they are
currently provided, through August 3, 2000.
(i) The Executive shall be entitled to retain the personal computer
and fax machine provided by the Company that are currently in the Executive's
home.
3. Stock Options. All options to acquire stock of the Company held
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by the Executive shall be vested in full as of February 3, 2000 (to the extent
not already vested), and notwithstanding clause (ii) of Section 5(d) of the
Employment Agreement, shall remain outstanding and exercisable until the
expiration of their original terms; provided, that such options shall
immediately expire if the Executive commits any material breach any of the
covenants set forth in Section 5(c)(i) below.
4. Mutual Nondisparagement. (a) The Executive shall not make,
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participate in the making of, or encourage any other person to make, any
statements, written or oral, which criticize, disparage, or defame the goodwill
or reputation of, or which are intended to embarrass or adversely affect the
morale of, the Company, any of its subsidiaries or affiliates, or any of their
respective present, former or future directors, officers, executives, employees
and/or shareholders. The Executive further agrees not to make any negative
statements, written or oral, relating to her employment, the termination of her
employment, or any aspect of the business of the Company or any of its
subsidiaries or affiliates.
(b) The Company shall not make, participate in the making of, or
encourage any employees or any other person to make, any statements, written or
oral, which criticize, disparage, or defame the reputation of, or which are
intended to embarrass, the Executive. The Company further agrees not to make
any negative statements, written or oral, relating to the Executive's employment
or the termination of her employment.
(c) Notwithstanding the foregoing, nothing in this Section 4 shall
prohibit any person from making truthful statements when required by order of a
court or other body having jurisdiction, or as otherwise may be required by law
or legal process.
5. The Executive's Covenants. (a) The Executive shall make herself
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available, from February 25, 2000 through December 31, 2000, for consulting with
the Company with respect to matters involving the Company or any of its
subsidiaries and affiliates that may be within the Executive's knowledge, for up
to 40 hours per month upon request at mutually convenient times and places. The
Company shall make available to the Executive Company-paid secretarial
assistance reasonably necessary for the provision of such consulting services;
provided, that the Executive shall have the option to request that such
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secretarial assistance be provided, for a period ending no earlier than April
24, 2000, by the person employed as the Executive's secretarial assistant as of
February 3, 2000 ("Current Secretary"), subject to the Current Secretary's
consent to serve in such capacity. The Executive shall also make herself
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available to the Company to assist the Company and its subsidiaries and
affiliates, as reasonably requested by the Company, with respect to pending and
future litigation, arbitrations, governmental investigations or other dispute
resolutions relating to matters that arose during the Executive's employment
with the Company and its subsidiaries and affiliates. The Company will reimburse
the Executive for all reasonable expenses and costs she may incur as a result of
providing services and assistance under this Section 5(a), upon receipt of
proper documentation thereof.
(b) The Executive shall remain bound by, and she hereby agrees to
comply with, the confidentiality provision of Section 11 of the Employment
Agreement.
(c) Until February 3, 2002, the Executive shall not, without the
prior written consent of the Company: (i) serve, directly or indirectly, alone
or in association with others as an employee, officer, director, consultant,
advisor, independent contractor, partner, or agent of, or otherwise render
personal services to, Hasbro, Inc., any subsidiary or affiliate of Hasbro, Inc.,
or any successor to any of them, or (ii) directly or indirectly employ, or
solicit the employment or services (whether as an employee, officer, director,
consultant, advisor, independent contractor, agent, partner or otherwise) of,
any person who was or is at any time during the previous twelve months an
employee, representative, officer or director of the Company or any of its
subsidiaries or affiliates, other than the home security personnel and
driver/personal bodyguard, in each case who were providing services to the
Executive as of February 3, 2000 and other than the Executive's Current
Secretary.
(d) The Executive acknowledges and agrees that because of the nature
of the business in which the Company and its subsidiaries and affiliates are
engaged and because of the nature of the confidential information to which the
Executive has had access during her employment, it would be impractical and
excessively difficult to determine the actual damages of the Company and its
subsidiaries and affiliates in the event the Executive breached any of the
covenants of Section 5(c), and remedies at law (such as monetary damages) for
any breach of the Executive's obligations under Section 5(c) would be
inadequate. The Executive therefore agrees and consents that if she commits any
breach of a covenant under Section 5(c) or threatens to commit any such breach,
the Company shall have the right (in addition to, and not in lieu of, any other
right or remedy that may be available to it) to temporary and permanent
injunctive relief from a court of competent jurisdiction, without posting any
bond or other security and without the necessity of proof of actual damage.
With respect to any provision of Section 5(c) finally determined to be
unenforceable, the Executive and the Company hereby agree that this Agreement or
any provision hereof may be reformed so that it is enforceable to the maximum
extent permitted by law. If any of the covenants of Section 5(c) are determined
to be wholly or partially unenforceable in any jurisdiction, such determination
shall not be a bar to or in any way diminish the Company's right to enforce any
such covenant in any other jurisdiction.
6. General Release: Time to Consider and Cancel the Agreement, Age
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Discrimination in Employment Act Waiver. (a) The Executive, on behalf of herself
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and her successors, assigns, heirs and any and all other persons claiming
through the Executive, if any, and each of them, shall and does hereby forever
relieve, release, and discharge the Company and its respective predecessors,
successors, assigns, owners, attorneys, representatives, affiliates, parent
corporations, subsidiaries (whether or not wholly-owned), divisions, partners
and their
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officers, directors, agents, employees, servants, executors, administrators,
accountants, investigators, insurers, and any and all other related individuals
and entities, if any, and each of them, in any and all capacities, from any and
all claims, debts, liabilities, demands, obligations, liens, promises, acts,
agreements, costs and expenses (including, but not limited to, attorneys' fees),
damages, actions and causes of action, of whatever kind or nature, including,
without limitation, any statutory, civil or administrative claim, or any
claim, arising out of acts or omissions occurring before the execution of this
Agreement, whether known or unknown, suspected or unsuspected, fixed or
contingent, apparent or concealed (collectively referred to as "claims"),
including, but not limited to, any claims based on, arising out of, related to
or connected with the subject matter of the Employment Agreement, this
Agreement, the Executive's employment or the termination thereof, and any and
all facts in any manner arising out of, related to or connected with the
Executive's employment with, or termination of employment from the Company and
its subsidiaries and affiliates, including, but not limited to, any claims
arising from rights under federal, state, and local laws prohibiting
discrimination on the basis of race, national origin, sex, religion, age,
marital status, pregnancy, handicap, ancestry, sexual orientation, or any other
form of discrimination, and any common law claims of any kind including, but not
limited to, contract, tort, and property rights including, but not limited to,
breach of contract, breach of the implied covenant of good faith and fair
dealing, tortious interference with contract or current or prospective economic
advantage, fraud, deceit, misrepresentation, defamation, wrongful termination,
infliction of emotional distress, breach of fiduciary duty, and any other common
law claim of any kind whatever.
(b) The Executive expressly waives any and all rights under Section
1542 of the Civil Code of the State of California, and all other federal or
state statutory rights, rules, and principles of common law or equity, including
without limitation those of any jurisdiction, government, or political
subdivision thereof, similar to Section 1542 ("similar provison"). Thus the
Executive may not invoke the benefits of Section 1542 or any similar provision
in order to prosecute or assert in any manner any claims released hereunder.
Section 1542 provides as follows.
A general release does not extend to claims which the creditor does
not know or suspect to exist in her favor at the time of executing
the release, which if known by her must have materially affected
her settlement with the debtor.
(c) The waiver given below in Section 6(d) is given only in exchange
for consideration in addition to anything of value to which the Executive is
already entitled. Such waiver does not waive rights or claims which may
arise after the date of execution of this Agreement. The Executive acknowledges
that: (i) this entire Agreement is written in a manner calculated to be
understood by her; (ii) she has been advised to consult with an attorney before
executing this Agreement; (iii) she was given a period of 21 days within which
to consider this Agreement; and (iv) to the extent she executes this Agreement
before the expiration of the 21-day period, she does so knowingly and
voluntarily and only after consulting her attorney. The Executive shall have
the right to cancel and revoke this Agreement during a period of 7 days
following her execution of this Agreement, and this Agreement shall not become
effective, and no money shall be paid hereunder until the expiration of such
7-day period. The 7-day period of revocation shall commence upon the date of
execution of this Agreement. In order to revoke this
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Agreement, the Executive shall deliver to the Company, prior to the expiration
of said 7-day period, a written notice of revocation.
(d) In addition to the release set forth above in this Section 6, the
Executive hereby voluntarily and knowingly waives all rights or claims arising
under the Federal Age Discrimination in Employment Act.
7. Arbitration of Disputes. (a) The Company and the Executive agree
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that any disputes, controversies or claims which arise out of or relate to this
Agreement, the Executive's employment or the termination of her employment,
including, but not limited to, any claim relating to the purported validity,
interpretation, enforceability or breach of this Agreement and/or any other
claim or controversy arising out of the relationship between the Executive and
the Company (or the nature of the relationship) or the termination of that
relationship, including, but not limited to, claims for breach of covenant,
breach of an implied covenant of good faith and fair dealing, breach of
contract, or intentional infliction of emotional distress, defamation, breach of
right of privacy, interference with advantageous or contractual relations,
fraud, conspiracy or other tort or property claims of any kind, which are not
settledby agreement between the parties, shall be settled by expedited
arbitration under the then-applicable arbitration rules of JAMS/Endispute (or
any other mutually agreed arbitrator) before a board of three arbitrators, as
selected thereunder.
(b) One arbitrator shall be selected by the Executive, one by the
Company and the third by the two persons so selected, all in accordance with the
then-applicable arbitration rules of JAMS/Endispute then in effect. In the
event that the arbitrator selected by the Executive and the arbitrator selected
by the Company are unable to agree upon a third arbitrator, then the third
arbitrator shall be selected from a list of seven each of whom shall be a member
of the "Independent List" of retired judges with experience in resolving
employment disputes provided by the Los Angeles office of JAMS/Endispute with
the parties striking names in order and the party striking first to be
determined by the flip of a coin. The arbitration shall be held in a location
to be mutually agreed upon by the parties. In the absence of agreement, the
Chairman of the arbitration panel shall determine the location.
(c) In consideration of the parties' agreement to submit to
arbitration as provided above and in further consideration of the anticipated
expedition and minimizing of expense resulting from this arbitration remedy, the
arbitration provisions of this Agreement shall provide the exclusive remedy, and
each party expressly waives any right she or it may have to seek redress in any
other form.
(d) Any claim which either party has against the other party which
could be submitted for resolution pursuant to this Section 7 must be presented
in writing by the claiming party to the other within the period of the
applicable statute of limitations. Unless the party against whom any claim is
asserted waives the time limits set forth above, any claim not brought within
the time periods specified shall be waived and forever barred.
(e) The Company will pay all costs and expenses of the arbitration to
the extent provided in this Section 7.
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(f) Any decision and award or order of a majority of the arbitrators
shall be binding upon the parties hereto and judgment thereon may be entered in
the Superior Court of the State of California or any other court having
jurisdiction. The Executive and the Company agree and consent that if she or it,
as applicable, commits any breach of her or its, as applicable, covenants under
this Agreement or threatens to commit any such breach, the other party shall
have the right (in addition to, and not in lieu of, any other right or remedy
that may be available) to temporary and permanent injunctive relief from the
arbitrators, without posting any bond or other security and without the
necessity of proof of actual damage.
(g) Each of the above terms and conditions of this Section 7
shall have separate validity and the invalidity of any part therof shall not
affect the remaining parts.
(h) Any decision and award or order of a majority of the arbitrators
shall be final and binding between the parties as to all claims which were
raised in connection with the dispute to the full extent permitted by law. In
all other cases, the parties agree that a decision of a majority of arbitrators
shall be a condition precedent to the institution or maintenance of any legal,
equitable, administrative, or other formal proceeding by the Executive in
connection with the dispute, and that the decision and opinion of the
arbitrators may be presented in any other forum on the merits of the dispute.
8. Entire Agreement; Other Benefits. This Agreement sets forth the
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entire agreement of the Company and the Executive with respect to the subject
matter hereof, and supersedes the Employment Agreement in its entirety except as
specifically provided herein; provided, that nothing in this Agreement shall be
deemed to affect in any manner any rights the Executive may have with respect to
vested benefits under employee benefit plans sponsored by the Company and its
subsidiaries and affiliates that are qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended. This Agreement does not supersede the
Executive's Indemnity Agreement with the Company or the indemnification
provisions contained in the Company's Restated Certificate of Incorporation or
By-Laws.
9. Successors. (a) This Agreement is personal to the Executive and
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without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall incure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall incure to the benefit of and be binding
upon the Company and its successors. The Company shall require any successor to
all or substantially all of the business and/or assets of the Company, whether
direct or indirect, by purchase, merger, consolidation, reorganization,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
10. Amendment; Waiver. This Agreement may be amended, modified or
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changed only by a written instrument executed by the Executive and the Company.
No provision of this Agreement may be waived except by a writing executed and
delivered by the party sought to be charged. Any such written waiver will be
effective only with respect to the event or
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circumstance described therein and not with respect to any other event or
circumstance, unless such waiver expressly provides to the contrary.
11. Miscellaneous. (a) This Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware, without
reference to principles or conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
(b) All notices and other communications hereunder shall be in
writing; shall be delivered by hand delivery to the other party or mailed by
registered or certified mail, return receipt requested, postage prepaid; shall
be deemed delivered upon actual receipt, and shall be addressed as follows:
if to the Executive:
Xxxx X. Xxxxx
with a copy to:
M. Xxxxxxx Xxxxxxxxx
Katten, Muchin & Zavis
1999 Avenue of the Stars
Xxx Xxxxxxx, XX 00000
If to the Company:
Mattel, Inc.
000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
(c) Notwithstanding any other provision of this Agreement, the
Company may withhold from any amounts or other transfers or assignments payable
under this Agreement, or any other benefits received pursuant hereto, such
Federal, state and/or local taxes as shall be required to be withheld from any
such, or any other, payments, transfers, assignments or benefits pursuant to any
applicable law or regulation. The Company may report, as required by any
applicable Federal, state or local law or regulation, any income or imputed
income payable under this Agreement.
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IN WITNESS WHEREOF, such of the parties hereto has duly executed this
Agreement as of the date first set forth above.
THE EXECUTIVE:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
THE COMPANY:
Mattel, Inc.
A Delaware corporation
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Interim CEO
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